Analysts' Upgrades, Downgrades: Merrill

Change in Ratings

Burlington Northern Santa Fe ( BNI) was upgraded at JP Morgan to Overweight from Neutral. Analyst believes BNI growth story will be driven by pricing and productivity gains, and less so on volume growth. JPM notes that falling fuel prices provide meaningful EPS support for BNI, which is not fully covered by surcharge due to legacy contracts. JPM believes a more appropriate valuation should be 13x 2009 EPS vs. current 11.8x forward P/E.

Salesforce.com ( CRM) was initiated with an Equal-weight rating at Morgan Stanley. Stock trades at a 30% premium to its peers, and its facing difficult fourth quarter comps.

CSX ( CSX) was upgraded at JPM to Overweight from Neutral. JPM believes recent sharp pullback and high earnings visability create a buying opportunity. JPM believes CSX's pricing and productivity strengths will be key EPS drivers, despite weak volumes for the next 2 years. According to JPM, CSX is currently trading at a 10.6x forward P/E vs. average historical forward range of 11x-15x.

Merrill Lynch ( MER) was downgraded at Citi to a Hold to reflect pending Bank of America ( BAC) acquisition of Merrill. Citi belives that MER/BAC will close and price target is set at $31.25 based on BAC's current price of $36.37 X conversion ratio of 0.8595. Risk rating raised to High inline with Citi's investment rating of BAC.

MetLife ( MET) was upgraded from Market Perform to Outperform, Keefe, Bruyette & Woods said. $65 price target. The group has sold off on mounting credit pressures, but MET has a strong capital profile.

Coverage of McAfee ( MFE) was started with an Overweight rating, Morgan Stanley said. $44 price target. Company should continue to gain market share in all key areas.

Pall ( PLL) was upgraded from Neutral to Buy, Merrill Lynch said. $39 price target. 75% of sales come from consumable products, and the company remains on track to deliver 12% earnings growth in 2009.

Schering-Plough ( SGP) was downgraded from Buy to Underperform, Merrill Lynch said. $18 price target. Expect Vytorin/Zetia issues to persist. Company is also the most exposed in the group to a stronger US dollar.

Trimble Navigation ( TRMB) was downgraded by Oppenheimer to Perform from Outperform and removed $39 price target due company's exposure to construction and agriculture- areas that are expected to experience a very challenging period. OpCo believes TRMB will trade in $18-$31 range and long term investors should look to accumulate under $20.

Stock Comments/EPS Changes

Shares of Bunge ( BG) now seen reaching $50, according to Merrill Lynch. Estimates also cut, based on lower expected fertilizer prices. Underperform rating.

Credit Suisse said it is lowering its target on Capella Education ( CPLA) to $55 from $70 based on lingering ERP concerns that could get worse in Q4. Maintained Outperform rating.

Goldman said it is reducing its 2008 estimates on Fortress Investment Group ( FIG) to $0.43 from $0.50 due to weak September returns and deteriorating conditions in the hedge fund industry. Price target cut to $11 from $12 and maintained Neutral rating.

Goldman said it is trimming its target on Whole Foods ( WFMI) to $21 from $22 based on lower earnings potential in slowing economic environment. Believe that concerns over consumer switching to lower-priced alternatives are more perception than reality. See economic backdrop will likely solidify recent sales deceleration. Maintained Neutral rating.

Strategy Calls/Market Calls

Merrill Lynch revised ratings on four electric utilities. Nisource ( NI) was upgraded from Underperform to Neutral, Merrill Lynch said. The rating on Xcel Energy ( XEL) was also raised from Neutral to Buy, as regulated utilities offer more safety in the current market. Additionally, Nstar ( NST) was downgraded to Neutral, and the rating on Scana ( SCG) was cut to Underperform.